On Thursday 25 July, the European Union finalised negotiations with Singapore on a Digital Trade Agreement (DTA), the first ever European agreement of this type, to complement the EU-Singapore Free Trade Agreement, which came into force in 2019.
The European Commissioner for Trade, Valdis Dombrovskis, welcomed the outcome of the negotiations, which he said would “support open, competitive, transparent and fair digital economies (...)”.
In particular, the agreement aims to further link the two economies, half of whose total trade in services was delivered digitally in 2022, representing €43 billion.
According to Grace Fu, Singapore’s Minister for Trade Relations, the agreement “will reduce costs and improve efficiency for businesses, especially SMEs, by enabling interoperable digital trade systems for electronic payments and paperless transactions”.
The rules to be adopted also aim to guarantee cross-border data flows “free of unjustified barriers” and to promote consumer protection online, including rules on combating spam.
However, Mr Dombrovskis underlined that the General Data Protection Regulation and EU rules on confidentiality were not covered by the scope of this Digital Trade Agreement.
The EU has already adopted extended free trade agreements in the digital sector with the United Kingdom, New Zealand and Chile.
However, this new agreement with Singapore is the first of its kind in the EU, since it is being adopted autonomously. In this way, it complements the existing free trade agreement and makes it possible to test a “more agile and targeted tool”, which ensures “relatively rapid deployment”, explained a European Commission official.
Because of this autonomous nature, Mr Dombrovskis does not believe that there will be a “close link” between this agreement and the ratification process for the main free trade agreement, which has so far been validated by only 18 Member States.
A standard ratification procedure will be applied for the Digital Trade Agreement, requiring formal adoption by the College of Commissioners, followed by referral to the EU Council, before the European Parliament gives its consent.
A similar agreement is also expected to be signed with South Korea (see EUROPE 13212/26).
To see the study on the potential impact of the Digital Trade Agreement: https://aeur.eu/f/d4x (Original version in French by Pauline Denys)